Downing Street Says » Foreign Office Funding

Asked if there was any more clarity on Foreign Office spending in Pakistan and in particular the fact that the Foreign Office used to hedge on foreign currency but no longer did so, the PMS said Chris Bryant would be giving a response in the House to an Urgent Question. In relation to the specific issue of currency, it was the case that there had been some currency pressures that the Foreign Office had been dealing with. The principal cause of this was the sustained fall in sterling.

Put that the Treasury had taken away the FCO’s ability to hedge on currencies, the PMS said he would get back to people with any more detail.

Asked what proportion of the cuts had been linked to counter terrorism projects, the PMS replied that it was important to put this in context; in 2010/11, the Government would be spending 3.5billion on counter terrorism, more than three times the level since 9/11.

The Foreign Office’s budget for counter terrorism had also increased significantly. In 2008/09 it was 35million, in 2009/10 it would be 36.9million and the projection for 2010/11 was 38million. Pakistan remained our highest priority in terms of counter terrorism and in Pakistan specifically FCO spending on counter terrorism had increased year by year.

In 2007/08 it was 3.7million, in 2008/09 it was 6.2million, in 2009/10 it was 8.3million and the projected figure was 9million for the next financial year. So in terms of actual spend, there had been an increase over the last few years.

There were other departments who spent significant sums of money on counter terrorism overseas. The UK gave more aid to Pakistan than it did to any other country and in the period 2009/13 we had increased aid to 665million. This was an extremely important commitment the Government made to counter terrorism and Pakistan was the key priority.

In that expenditure there would be decisions on individual programmes and those decisions were a matter for the Foreign Office. All departments kept spending under review and that could mean cutting individual projects if it was the case that they were not delivering the results we were seeking.

Put that Baroness Kinnock was not making a point about individual projects and what she had actually said was the cuts were being made because of the exchange rate, something that used to be protected before being removed by the Treasury in 2007, the PMS replied that what Baroness Kinnock had been talking about were individual projects that needed to be looked at in terms of delivery.

The Government was not spending less on counter terrorism. The PMS added that he did not know the specific detail of the currency implications, but the fact was actual spend on counter terrorism in Pakistan had grown and would continue to grow in the future.

Asked if it was a mistake to remove the protection on the currency scheme, the PMS said that there were a number of sensible reasons for doing that and it wasn’t for him to talk about it retrospectively. The most important thing was to be clear about counter-terrorism spending.

Asked if the Government was aware that Baroness Kinnock would be making the comments, the PMS replied that the Government was aware that Baroness Kinnock was before the House of Lords yesterday. We worked very closely with the FCO and Baroness Kinnock was regularly questioned in the House of Lords about her portfolio.

Asked whether the Government would make up the 110million shortfall, the PMS replied that clearly every department was looking at cuts as appropriate. The programme on counter terrorism was rock-solid and the expenditure was a significant part of what the Government was doing.

Put that the amount being spent in the UK had increased but due to currency fluctuations it could turn out to be less once it had arrived in Pakistan, the PMS said that the way projects worked did not mean that money was necessarily physically transferred to India or Pakistan. The PMS was happy to look at the issue of currency, but the Government talked about its budget in pounds sterling.

Put that the key point was not the money spent in the UK but the effect at the other end in Pakistan, the PMS replied that the Government accounted for what it spent in sterling.

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» Thursday, January 21, 2010

Foreign Office Funding

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